I am buying a 2005 Chevy Impala LS w/ 29k miles from a local dealer. The vehicle has the remaining factory warranty for the next 7k miles. They are offering a warranty through GM that is bumper to bumper with no deductible. 3 year/36k miles for $1600. I have heard you can shop around with other GM dealers and prices will vary.

Is this warranty a good idea?

Should I look around for something aftermarket rather than GM?

I usually just skip the extended warranties all together on vehicles this new but I thought I would get some other opinions.

Thanks, ST.

 

I spent $2k on a warranty for a RAM 1500 several years ago, and it just so happens that everything that went wrong on that truck wasn't covered...go figure.

They're a calculated gamble, but if you read the fine print and know what's covered and you don't have much tolerance for forking out cash on major repairs, it may be worth it. However, if you polled a group of people and asked if they had ever spent over $1600 on (covered) repairs on a more-or-less new vehicle in the first 3 years, I suspect that would probably be a short list. My personal opinion is that they aren't worth the money; if most people got their money's worth from warranties, then warranty companies would stop offering them. That's why household warranty and electronics warranty sellers are so aggresive the past decade: they are a cash cow, which means they are intaking a lot more than they are paying out.

 

You hit the nail on the head, jbrooks. If they weren't making money on the extended warranties they wouldn't be selling them (and many of them are administered by third parties anyway). Calculated gamble, of course; the engine could blow right after the factory warranty runs out, but the odds are against that happening. For my money I would spend the $1600 on frequent oil changes and tranny services. The engine and trans are about the only major components that could give you a return on your extended warranty $ if you had a failure (and, of course, the first thing they would ask for is your meticulous records of oil changes, etc).

As stated, the sales of extended warrranties is a big cash cow, especially in the electronics field where, I suspect, the profit margin is even bigger. I've been offered $9.95 extended warranties on items as cheap as $29.95.

My $.02 worth.

 

I would take the $1600 and park it in a savings account to be used for repairs. Do this every time you're offered an extended warranty and you'll quickly see the balance in your account grow.